the risk of money laundering or the financing of terrorism is low:

funds paid to bodies corporate or body corporate managers are only payable by unit owners of bodies corporate:

funds are not accepted from any other parties (unless it is clear that such parties are acting as a unit owner’s agent, such as a lawyer or an accountant paying on instructions from their client):

funds are payable on levies struck during a financial year or (in the case of body corporate managers) on the supply of an invoice showing levies struck by the body corporate for the financial year:

the levies struck are intended to cover the costs of insurance and other outgoings for that year, and, if further funds are required during the year, additional levies are struck by the body corporate:

payments are made by direct credit to either the body corporate or body corporate manager and, on receipt, funds are held in specific accounts as required by the UT Act:

where a body corporate has instructed a lawyer to receive payments from unit owners, or where a unit owner’s mortgagee requires funds advanced to the owner to meet levies to be paid into a lawyer’s trust account under an escrow arrangement, those funds are held in the lawyer’s trust account on receipt:

where the amount levied is in excess of the amount required for the year’s outgoings, the surplus is usually credited to a long-term maintenance fund or offset against the next year’s levies:

individual unit owners have no control or ability to move money once it is received by the body corporate or body corporate manager:

there is no automatic right of withdrawal or ability to use funds once levies are paid. Any surplus at the end of the financial year is usually minimal, and those amounts are not usually returned to unit owners, but retained in the manner set out above.

sections 5 to 38; and

sections 50 to 91; and

sections 106 to 115.

the statutory trustee corporations in respect of the following personal trust services:

Public Trust in respect of the personal trust service of being appointed to act as trustee, agent, manager, or receiver by operation of statute (for example, having money paid to Public Trust pursuant to the Local Government (Rating) Act 2002):

the Māori Trustee in respect of the following personal trust services:

means services provided by the statutory trustee corporations in a fiduciary capacity to individuals or the groups listed in clause 2; but

excludes any services provided by the statutory trustee corporations in their capacities as trustees or supervisors in respect of an issue of securities to the public or activities related to the issue of securities.

there is a low risk of money laundering or terrorism financing through the statutory trustee corporations when they are providing personal trust services, because—

the obligations imposed on the statutory trustee corporations would be disproportionate given the low risk of money laundering or terrorism financing in the circumstances outlined in this exemption.

be collected by the employer or sponsor, or by a related company (as defined in the Companies Act 1993) on behalf of the employer or sponsor, or by the retirement scheme’s administration manager; and

not exceed (as to either amount or frequency) the contributions that were being paid by the relevant member immediately prior to the member commencing leave of absence.

sections 10 to 17 (and, for the purposes of section 14(1)(d), the first withdrawal is specified as a circumstance in which standard customer due diligence must be conducted); and

sections 39A to 48; and

sections 48A to 48C; and

section 49.

sections 10 to 36; and

sections 39A to 48; and

sections 48A to 48C; and

section 49.

sections 10 to 17 (and, for the purposes of section 14(1)(d), the receipt of a contribution from an international source is specified as a circumstance in which standard customer due diligence must be conducted); and

sections 39A to 48; and

sections 48A to 48C; and

section 49.

the specified retirement schemes pose a low risk of money laundering or terrorism financing; and

any risks posed by voluntary contributions outside of payroll, transfers from international sources, and withdrawals have been addressed by the conditions; and

due to the low money laundering and terrorism financing risks raised by the specified retirement schemes and the significant compliance costs that would arise from not granting this exemption, I consider that any benefits of requiring compliance with the Act are not justified by the associated costs; and

this exemption is consistent with (and has no effect on the purpose or intent of) the Act, the Financial Transactions Reporting Act 1996, and New Zealand’s international obligations as a member of the Financial Action Task Force and the Asia/Pacific Group on Money Laundering.

sections 11 to 39:

section 49:

sections 50 to 71:

sections 106 to 115.

the exemption applies only to transfers between New Zealand bank accounts and does not extend to any transfer from or to a foreign bank account:

to be eligible for the exemption, a PAYE intermediary must not use or provide any payroll remittance card in the course of its authorised activities.

the risk of money laundering or terrorist financing through the authorised transactions conducted by PAYE intermediaries is low because—

any benefits of requiring compliance with the Act are not justified given the associated costs owing to the low money laundering and terrorism financing risks raised by the authorised transactions conducted by PAYE intermediaries and the significant compliance costs that would arise in the absence of this exemption.

the requirement to conduct standard customer due diligence under sections 14 to 17 of the Act:

in relation to customers who are LMI customers only, the requirement, in any circumstances where the reporting entity is required to conduct enhanced customer due diligence, to carry out the identification and verification requirements under sections 23 and 24(1) of the Act on any beneficial owner of the customer:

the requirement to conduct enhanced customer due diligence, under sections 23 to 25 of the Act, in circumstances where—

the reporting entity must conduct simplified customer due diligence on the licensed managing intermediary in respect of which the exemption is relied on; and

the reporting entity must conduct enhanced customer due diligence on a customer in accordance with section 22A(2) of the Act if the customer conducts a transaction to which section 22A of the Act applies; and

the reporting entity must take reasonable steps to verify that a customer in respect of which this exemption is relied on is a licensed managing intermediary (for example, by checking a register kept by the Registrar of Financial Service Providers); and

the reporting entity must comply with any request from its AML/CFT supervisor for the name of 1 or more customers in respect of which the exemption is relied on.

the reporting entity must conduct simplified customer due diligence on a licensed managing intermediary that provides 1 or more financial services to the LMI customer in connection with the services provided by the reporting entity to the LMI customer, as if the licensed managing intermediary were the customer of the reporting entity in relation to those services; and

the reporting entity must conduct enhanced customer due diligence on an LMI customer in accordance with section 22A(2) of the Act if the reporting entity is instructed to conduct a transaction in respect of an LMI customer to which section 22A of the Act applies; and

the reporting entity—

the reporting entity must comply with any requests from its AML/CFT supervisors for the name of 1 or more LMI customers in respect of which the exemption is relied on.

there is a low risk of money laundering or terrorism financing in respect of transactions relating to licensed managing intermediaries and LMI customers because licensed managing intermediaries operate within a heavily regulated environment; and

the requirement for a reporting entity to conduct standard customer due diligence on a licensed managing intermediary or an LMI customer may lead to duplication of customer due diligence obligations; and

the requirement for a reporting entity to conduct customer due diligence on all beneficial owners of a licensed managing intermediary—

the requirement to conduct customer due diligence, under section 11(1)(b) of the Act, on any beneficial owner of a customer:

the requirement, in any circumstances where the reporting entity is required to conduct enhanced customer due diligence, to carry out the identification and verification requirements under sections 23 and 24(1) of the Act on any beneficial owner of the customer:

the requirement to conduct enhanced customer due diligence, under sections 23 to 25 of the Act, in circumstances where—

clause 1(a) and (b) must not be relied on in respect of a beneficial owner that has effective control, or owns more than 25%, of the customer; and

the reporting entity must conduct enhanced customer due diligence on the customer in accordance with section 22A(2) of the Act if the customer conducts a transaction to which section 22A of the Act applies; and

the reporting entity—

the reporting entity must comply with any request from its AML/CFT supervisor for the name of 1 or more customers in respect of which the exemption is relied on.

clause 1(a) and (b) may not be relied on in respect of an SMI customer that has effective control, or owns more than 25%, of the specified managing intermediary; and

the reporting entity must conduct enhanced due diligence on an SMI customer in accordance with section 22A(2) of the Act if the SMI customer conducts a transaction to which section 22A of the Act applies; and

the reporting entity—

the reporting entity must comply with any request from its AML/CFT supervisor for the name of 1 or more SMI customers in respect of which the exemption is relied on.

may lead to duplication of customer due diligence obligations; and

has associated costs, may give rise to privacy concerns, and may deter international investment; and

is out of proportion to the risk of money laundering and terrorism financing posed.

section 56(2); and

section 56(4).

a reporting entity must appoint an employee of a member of the designated business group to act as their compliance officer under the Act (the shared compliance officer); and

if the designated business group does not have employees, the reporting entity must appoint a person to act as the shared compliance officer for the designated business group; and

the shared compliance officer must be domiciled in either New Zealand or Australia; and

the shared compliance officer must administer and maintain the AML/CFT programmes of each member of the designated business group that is a reporting entity and has appointed the shared compliance officer; and

the shared compliance officer must report to a senior manager of each member of the designated business group that has appointed the shared compliance officer.

the relevant financial advice provider has reasonable cause to believe the manager of the relevant retirement scheme is compliant with its obligations under the Act; and

the relevant financial advice provider must, for the purposes of section 34 of the Act, act as an agent of the manager of the relevant retirement scheme, and agree to carry out, and carry out, the following obligations on behalf of the manager:

financial advice providers act on behalf of retirement scheme managers to undertake anti-money laundering and countering financing of terrorism obligations:

there is a low risk of money laundering or financing of terrorism in relation to retirement schemes:

the exemption reduces the compliance burden for financial advice providers that only provide advice on retirement schemes and removes any duplication of costs relating to customer due diligence and transaction reporting that must be carried out by retirement scheme managers in relation to the same customers.

there is a low risk of money laundering or financing of terrorism associated with specified employee security purchase schemes due to the enduring relationship that the relevant person is likely to have with the eligible person, and a range of verifiable identity information is held about eligible persons:

the obligations imposed on relevant persons would be disproportionate given the low risk of money laundering and financing of terrorism:

money laundering and financing of terrorism risks are further mitigated by the condition that offers of specified securities must be made as part of the remuneration arrangements of eligible persons:

the exemption is consistent with the Act and New Zealand’s obligations as a member of the Financial Action Task Force, and there is a low risk of the exemption having an adverse impact on the integrity of, and compliance with, the Act.

in the case of a dividend or distribution reinvestment scheme, the specified securities must only be issued to or acquired by specified investors to the extent of their participation in the reinvestment scheme, and where all or a specified part of the net proceeds of the dividends or distributions payable are applied to the purchase of the specified securities:

in the case of an investment scheme, the specified securities must only be issued to or acquired by specified investors to the extent of the specified investors’ entitlement under the investment scheme to purchase specified securities by means other than cash payment.

there is a low risk of money laundering or financing of terrorism associated with specified securities investment schemes because,—

the obligations imposed on relevant persons administering the specified securities investment schemes would be disproportionate given the low risk of money laundering and financing of terrorism:

money laundering and financing of terrorism risks are further mitigated by the conditions of this exemption, which mean that the specified investor cannot pay cash for the acquisition of specified securities:

the exemption is consistent with the Act and New Zealand’s obligations as a member of the Financial Action Task Force, and there is a low risk of the exemption having an adverse impact on the integrity of, and compliance with, the Act.

sections 14(1)(a), 22(1)(a), and 26(1); and

subject to clause 5 of this Part, section 31.

generates points or credit exclusively through any of the following:

meets the following criteria:

a business relationship that is a membership in a casino loyalty scheme operated by a casino:

a casino loyalty scheme card or an instrument that is used by a customer for the purpose of utilising membership in a casino loyalty scheme.

in relation to clause 3(a), to any casino loyalty card or instrument that enables cashless gambling:

in relation to clause 3(b), to any casino loyalty card or instrument that enables other functions to be carried out, including cashless transactions.

applies only to the obligation to monitor the generation of loyalty points and the redemption of loyalty points; and

does not affect the obligation to conduct other account monitoring that might identify grounds for reporting a suspicious activity; and

does not affect obligations under section 40 of the Act to report an activity or a suspicious activity.

before an application for membership in the loyalty scheme is accepted, the casino must identify each customer and be reasonably satisfied that it has established the customer’s identity; and

in relation to a customer identified under paragraph (a), the casino must keep its identity and verification records for a period of 5 years after the end of the business relationship with that customer to assist agencies in the detection, investigation, and prosecution of offences; and

section 11(4) of the Act does not apply where information is obtained for the purpose of identification and verification under paragraph (a).

the money laundering risk associated with casino loyalty schemes is lowered by the criteria listed in clause 2(b); and

the conditions set out in clause 6 sufficiently mitigate any negative impact on the prevention, detection, investigation, and prosecution of offences this exemption may have; and

the compliance burden that casinos would be subject to, in the absence of this exemption, is disproportionate to the risk of money laundering associated with casino loyalty schemes.

a statutory supervisor is required, in accordance with sections 14 to 17 of the Act, to undertake standard customer due diligence on the recipient of any refunded moneys when—

a statutory supervisor is required, in accordance with sections 23 and 24 of the Act, to undertake enhanced customer due diligence on the recipient referred to in paragraph (a) if the statutory supervisor is required to report the cancellation and refund to the Commissioner as an activity, or suspicious activity, under section 40(3) of the Act.

statutory supervisors usually only hold the deposit paid by potential retirement village residents, which is ordinarily between $2,500 and $5,000; and

there is a comprehensive regime in place regulating the way a prospective resident may enter into an occupation right agreement; and

statutory supervisors do not deal in cash, no moneys are passed through a third party, and, by way of separate identification, an independent lawyer is required to certify that a statutory supervisor has advised a prospective resident prior to the signing of an occupation right agreement (this ensures there is minimal risk of funds being transferred into the hands of potential money launderers); and

when a deposit is paid by someone other than the intended resident, confirmation of the source of funds is required if the reporting entity considers that enhanced due diligence should apply owing to the level of risk involved.

any money paid in respect of an occupation right agreement can be refunded during the 15-working-day cooling-off period as a matter of right; and

although unusual, some operators receive a high proportion of the purchase price during the cooling-off period and progress payments are also often received during that period (any progress payments received must be held by the statutory supervisor until settlement or cancellation of the occupation right agreement).

the designated issuer must take all reasonably practicable steps to satisfy itself that each intermediary will comply fully with its obligations under sections 10 to 26 and 37 of the Act as they apply to specified subscribers; and

the designated issuer may require each intermediary to provide the designated issuer with the customer due diligence information of all specified subscribers that the intermediary holds or has obtained under the Act; and

the designated issuer must comply with all relevant obligations in the Act in relation to customer due diligence information concerning the specified subscribers that the designated issuer receives (excluding obligations under sections 10 to 26 and 37 of the Act, but including record keeping and all other obligations).

the low level of risk of money laundering or financing of terrorism associated with issuing debt securities to specified subscribers means that requiring designated issuers to comply with their obligations under sections 10 to 26 and 37 of the Act is of little benefit:

the regulatory burden of compliance would be disproportionate to the benefits in this context:

each specified subscriber for debt securities must be a customer of an intermediary through which that customer applies for debt securities, and each intermediary must be a reporting entity for the purposes of the Act (requiring the designated issuer to conduct customer due diligence on specified subscribers may lead to duplication of customer due diligence obligations).

sections 10 to 21 (standard and simplified customer due diligence):

sections 22 and 23 to 26 (enhanced due diligence except in circumstances where section 22A applies):

sections 29 and 30 (correspondent banking relationships):

sections 32 to 39 (reliance on third parties and prohibitions):

sections 50 to 55 (identity and verification of records):

sections 68 to 71 (cross-border transportation of cash).

in respect of each client that is a company, a TPI must hold identity information that is publicly available in relation to that company at the time the business relationship between the client and the TPI is entered into and at such time the client instructs the TPI to refund a deposit, or any portion of that deposit:

in respect of all clients, a TPI must hold identity information for at least 1 individual who has authority to act on behalf of the client:

before a client’s deposit is transferred from the TPI’s tax pooling account to the client’s account at the Inland Revenue Department, the TPI must take reasonable steps to ascertain the amount of the client’s tax liability that the transfer is made to satisfy:

a TPI must, when a refund from the TPI’s tax pooling account is requested by a client, ensure that it has completed CDD to the level required under the Act before that refund is made:

in respect of all clients and transactions, a TPI must continue to meet all other requirements of the Act (unless otherwise exempted from above) including account monitoring, suspicious activity reporting, and prescribed transaction reporting:

a TPI must, when a suspicious activity report is required to be submitted pursuant to section 40 of the Act,—

there is a low risk of ML/TF associated with specified tax pooling transactions and the conditions associated with the conditions sufficiently mitigate remaining ML/TF risk:

in the absence of the exemption, the regulatory burden of compliance in respect of specified tax pooling transactions would be disproportionate to the benefits:

the compliance obligations continue to apply in respect of other higher-risk transactions involving a tax pooling account, including any refunds made from the account.

sections 11 (customer due diligence) and 12 (reliance on risk assessment when establishing level of risk):

sections 14 to 21 (standard and simplified customer due diligence):

section 22(1), (2), and (5) (circumstances in which enhanced customer due diligence applies):

sections 22A to 25 (enhanced customer due diligence):

section 26 (politically exposed person):

section 30 (new or developing technologies, or products, that might favour anonymity):

section 31 (ongoing customer due diligence and account monitoring):

sections 37 to 39 (prohibitions):

sections 56 (reporting entity must have AML/CFT programme and AML/CFT compliance officer) and 57 (minimum requirements for AML/CFT programmes):

sections 58 (risk assessment) and 59 (review and audit of risk assessment and AML/CFT programmes):

section 59B (who carries out audit):

section 60 (annual AML/CFT report).

section 11 (customer due diligence), except where sections 22(1) and 22A apply:

section 12 (reliance on risk assessment when establishing level of risk):

sections 14 to 17 (standard customer due diligence):

section 22(2) and (5) (circumstances in which enhanced customer due diligence applies):

section 26 (politically exposed person):

sections 30 (new or developing technologies, or products, that might favour anonymity) and 31 (ongoing customer due diligence and account monitoring):

sections 56 (reporting entity must have AML/CFT programme and AML/CFT compliance officer) and 57 (minimum requirements for AML/CFT programmes):

sections 58 (risk assessment) and 59 (review and audit of risk assessment and AML/CFT programmes):

section 59B (who carries out audit):

section 60 (annual AML/CFT report).

a barrister who receives instructions directly from a client (other than the Crown or a solicitor in respect of a client); or

a barrister who performs the activities listed in the definition of a designated non-financial business or profession in section 5 of the Act (outside of the instructions of a lawyer).

the ML/TF risks associated with barristers are mitigated by—

barristers who are captured by the Act will still be required to file suspicious activity reports, complete simplified customer due diligence when taking instructions from the Crown, conduct enhanced due diligence in specific circumstances, keep the appropriate records, and make the records available to the Department of Internal Affairs when requested:

the instructing solicitor is subject to full AML/CFT obligations with respect to the same work and same client. This means that requiring barristers to comply with the full suite of obligations under Part 2 of the Act is unlikely to increase the overall effectiveness of the AML/CFT regime:

given how barristers operate their business (as sole practitioners with few, if any, dedicated support staff), full AML/CFT obligations would result in a disproportionate compliance burden for barristers.

experts both in New Zealand and internationally, including police and supervisory authorities, recognise that accounting practices are at risk of being used to facilitate money laundering and the financing of terrorism:

in the absence of this exemption, reporting entities that are accounting practices would generally be required to conduct customer due diligence, or to comply with other requirements of the Act, in connection with any requests that they make on behalf of their customers for the Commissioner of Inland Revenue to action tax transfers under Part 10B of the Tax Administration Act 1994:

a number of those tax transfers (defined in this Part as relevant tax transfers) have little risk of facilitating money laundering or the financing of terrorism:

in the absence of this exemption, the regulatory burden on the reporting entities that is connected with requests for relevant tax transfers (defined in this Part as relevant transfer requests) would be disproportionate to that risk:

this exemption reduces that regulatory burden, but does not exempt the reporting entities from requirements—

the continued application of those requirements to the reporting entities will adequately address the risk that they may be used to facilitate money laundering or the financing of terrorism through relevant transfer requests.

considers that there is an increased risk of money laundering or financing of terrorism involved in the situation concerned; and

has formed that view solely or partly—

considers that there is a risk that complying with the requirement would tip off the customer or the other CDD target.

has formed the relevant suspicion solely or partly—

considers that there is a risk that complying with the requirement would tip off the customer or the other CDD target.

considers that there is an increased risk of money laundering or financing of terrorism involved in the business relationship or the activities relating to that relationship; and

has formed that view solely or partly—

considers that there is a risk that complying with the requirement would tip off the customer or the other CDD target.

not to establish a business relationship with the customer; and

to terminate any existing business relationship with the customer; and

not to carry out an occasional transaction or activity with or for the customer; and

to consider whether to make a suspicious activity report.

the requirement under section 37(1)(e) to disclose the possibility of making a suspicious transaction report only to a person specified in section 46(2):

the requirement under section 46(2) (including as applied by section 48C) not to disclose information referred to in section 46(1) (including as applied by section 48C) except to a person specified in section 46(2).

a money laundering offence:

an offence within the meaning of that term in section 243(1) of the Crimes Act 1961:

an offence under the Terrorism Suppression Act 2002.

the customer or the other CDD target may be under investigation; or

the activity or activities conducted or sought to be conducted by the customer may be brought to the attention of the New Zealand Police.

the co-operation of reporting entities with law enforcement agencies is consistent with the Act and expectations of the inter-governmental Financial Action Task Force:

the FCPN—

the exemption will enhance the detection and deterrence of money laundering and financing of terrorism by—

to the reporting entity, any agent of that reporting entity, or any sub-agent of that reporting entity; and

to improve compliance with the requirements of the Act and regulations made under the Act.

it will enable operators of a money or value transfer service to better comply with their reporting obligations under the Act:

it will enhance the detection and deterrence of money laundering and financing of terrorism by—

in relation to a customer that is a company, a director within the meaning of section 126 of the Companies Act 1993; and

in relation to a customer that is not a company, a person who occupies a position comparable to that of a director (for example, a trustee or partner); and

any other person who occupies a position within a customer that allows that person to exercise an influence over the management or administration of the customer (for example, a chief executive or a chief financial officer).

the identity information of a senior manager of the customer has been obtained and verified in accordance with sections 19 and 20 of the Act:

the person acting on behalf of the customer is an employee of the customer:

the reporting entity and the customer have a written agreement setting out the required steps for employees of the customer to be delegated and authorised to act on behalf of the customer, including the method of correspondence by electronic means and the activities that the employee is authorised to carry out on behalf of the customer:

the senior manager has notified the reporting entity that the employee is authorised to act on behalf of the customer.

this exemption reduces the regulatory burden of compliance on reporting entities in relation to some large customers that may have multiple employees acting on their behalf, subject to the conditions in clause 3:

the risk of money laundering and the financing of terrorism associated with the reporting entity is low because the exemption has only been granted in relation to employees acting on behalf of the customer by electronic means and is subject to the safeguards provided by the conditions in clause 3.

sections 37(1)(e) (disclosing possibility of making suspicious activity report):

section 46(2) and (8) (prohibiting certain disclosures of information):

section 48C (applying sections 43 to 48 to prescribed transactions) to the extent that it prohibits the disclosure of PTR information.

participants may only disclose SAR information and PTR information to other participants and service providers and only for law enforcement purposes:

participants must consider compliance with the relevant aspects of the exemption as part of their AML/CFT programmes:

GVL must consult the Ministry of Justice before admitting additional participants into the Ecosystem:

GVL must notify the Ministry of Justice of any other changes affecting the exemption within 10 working days after the changes occur.

it will enhance the detection and deterrence of money laundering by enabling greater detection and prevention of fraud and scams:

the AML/CTF risks associated with the exemption are considered low because—

GVL must consult the Ministry of Justice before admitting additional participants into the Ecosystem.